What are Unit Linked Insurance Plans (ULIP)?
A ULIP, or a Unit-Linked Insurance Plan, is a powerful financial tool that combines the dual benefits of market linked returns and life insurance. It helps you build wealth and reach important financial goals, such as securing your retirement or funding your children’s higher education. With the added benefit of life cover, it not only helps your money grow but also protects your loved ones’ future from life's unexpected turns.
How Does A ULIP Work?
A ULIP (Unit-Linked Insurance Plan) divides your premium into two parts: wealth-building and life cover. The wealth-building portion is invested in equity, debt, or balanced funds, based on your risk appetite, helping you grow your money. The life cover provides financial security to your nominees in case of unforeseen events, ensuring both wealth creation and insurance protection.
What are ULIP Funds?
When you purchase a ULIP, a part of your premium is invested in funds of your choice.
Types of ULIP Funds
Equity Funds
What are they?
These funds invest in stocks + equity markets and are closely connected to market movement.
Nature of Funds :
Higher risk but offers the potential for higher long-term returns depending on the stock markets.
Who is it for?
Ideal for those looking to grow their wealth and are okay with the dynamic nature of the market
Debt Funds
What are they?
These funds focus on government bonds, fixed-income securities, & low-risk instruments.
Nature of Funds :
Lower risk with more stable but moderate returns.
Who is it for?
Ideal for those seeking safety and predictable growth, such as those close to retirement or with lower risk tolerance.
Balanced Funds
What are they?
A combination of equity and debt instruments.
Nature of Funds :
Medium risk with moderate returns. Balanced funds aim to provide the best of both worlds.
Who is it for?
Perfect for those who want steady growth with a mix of safety and opportunity for higher returns.
Did you know?
At Bandhan Life, our funds are managed by professionals and are designed to grow your wealth over a period of time, depending upon the market performance.
How to Manage ULIPs
Start Early: The sooner you by a ULIP, the more time your money has to grow through compounding. Early planning gives you a head start for goals like retirement or your child's education.
Choose Wisely: When you buy a ULIP plan, select funds that align with your goals and risk tolerance. If you prefer higher returns, opt for equity funds. For safer options, consider debt or balanced funds.
Monitor Regularly: Keep an eye on how your funds in your ULIP are are performing. Review your portfolio to ensure it stays on track with your financial goals. Make adjustments if necessary.
Switch Funds Easily: ULIPs offer the flexibility to switch between equity, debt, or balanced funds as your goals or market conditions change. Monitor and switch the funds accordingly.
Leverage Tax Benefits%: ULIPs offer tax benefits. Enjoy tax deductions under Section 80C and tax-free maturity benefits under Section 10(10D).
Stay Long-Term: ULIPs work best for long-term goals. A longer horizon helps you ride out market ups and downs, maximizing potential returns.
What are ULIP Charges?
Premium Allocation Charge“
Upfront fees deducted from the premium to cover initial expenses like allocation, and distribution. These may reduce or vanish over time.
Fund Management Charge
Insurers charge a small percentage of the fund's value daily for managing ULIP investments. Capped at 1.35% per annum as per IRDAI rules, it varies based on fund type.
Mortality Charge'
Covers the life insurance component, determined by your age, health, & life cover. Young, healthy individuals pay lower mortality charges.
Policy Administration Charge
Monthly deductions for administrative functions such as, maintaining the policy and handling premiums.
Surrender or Discontinuation Charge
If you exit the plan before the 5-year lock-in period, a charge applies. After the lock-in, most ULIPs don’t have a surrender fees.
Switching Charge
ULIP plans offer a limited number of free fund switches (e.g., equity to debt). Exceeding the free limit incurs nominal charges.
Partial Withdrawal Charge
Some ULIPs allow free withdrawals post-lock-in, but excess withdrawals may attract fees.
Rider Charges`
Additional riders (e.g. accidental death riders) involve extra charges, either added to premiums or deducted from the fund value.
Why Should you Buy ULIPs?
Protect family against future uncertainties
You get life insurance coverage and market-linked returns in one product. Your family is protected, while your money works towards your future goals.
Tax Efficiency%
Enjoy tax benefits not only on premiums paid but tax-free maturity benefits as well. This makes ULIPs an efficient tool for both saving and growing wealth.
Wealth Creation
ULIP plans offer the potential for long-term wealth growth, making them ideal for major goals like:
- Setting up a retirement fund for a fulfilling lifestyle
- Higher education of children or getting them married
- Pursuing a hobby (going on a world tour OR buying that sports car)
Who Should Buy ULIPs?
If you're early in your career and want to build wealth while securing your family’s future, a ULIP plan gives you the chance to participate in market-linked funds for long-term growth while also offering life insurance protection.
For those comfortable with market volatility, ULIP plans allow you to participate in equity or balanced funds, offering higher returns over time. You can switch funds based on your changing risk tolerance or market conditions.
Whether you’re saving for a new home or your child’s education, ULIPs help you achieve your financial goals while staying protected with a life insurance cover.
If you're focused on building a secure financial cushion for retirement, ULIP policies are the best choice. They help grow your wealth over time and offer protection for your loved ones.
How to Choose the Best ULIP Plan for Yourself
When selecting a ULIP, consider the following factors
Life Goals: Align your ULIP choice with the financial objectives you want to achieve
Insurance objectives: Also take into account how much life insurance coverage you require
Risk Appetite: Understand your risk tolerance and select the appropriate fund type.
Fund Performance: Review the past performance of the ULIP funds.
ULIP Charges: Be aware of charges, such as fund management fees and premium allocation charges”.
Solvency Ratio: This indicates the insurer’s financial stability and ability to meet claims. The higher the ratio, the better.
Flexibility: Choose a ULIP that allows you to switch between funds according to your needs and market conditions.
Remember: Before you buy a ULIP plan, compare the plans & check Claim Settlement Ratio (CSR) of the company.
We Keep Our Promises!
How to Ensure Your Claims Are Settled?
Why Should You Choose Bandhan Life?
^99.73% Claim Settlement Ratio
We have a proven track record to promptly and efficiently settle our claims.
100% Online
We do not ask you to upload or scan any documents unless it’s necessary.
Super Simple Products
Why complicate things? Our products are super-simple and easy to understand.
Always There For You
Our expert advisors are always at your service, ready to answer all your questions and help you understand your policy better
A Part Of The Bandhan Group
As a part of the Bandhan Group, we have a legacy of trust and empathy to fulfill your dreams
^99.73% Claim Settlement Ratio
We have a proven track record to promptly and efficiently settle our claims.
100% Online
We do not ask you to upload or scan any documents unless it’s necessary.
Super Simple Products
Why complicate things? Our products are super-simple and easy to understand.
Always There For You
Our expert advisors are always at your service, ready to answer all your questions and help you understand your policy better
A Part Of The Bandhan Group
As a part of the Bandhan Group, we have a legacy of trust and empathy to fulfill your dreams
Highlights
Get Market Linked Returns!
Zero hidden costs
Loyalty Additions on Maturity"
Highlights
Get Market Linked Returns!
Zero hidden costs
Loyalty Additions on Maturity"
Highlights
Market-Linked Returns with upto 50X Life Cover
3X Mortality Charges Returned‘
Loyalty Additions#*
Not sure? Check out our other plans
Highlights
Get Market Linked Returns!
Zero hidden costs
Loyalty Additions on Maturity"
Highlights
Get Market Linked Returns!
Zero hidden costs
Loyalty Additions on Maturity"
Highlights
Market-Linked Returns with upto 50X Life Cover
3X Mortality Charges Returned‘
Loyalty Additions#*
Not sure? Check out our other plans
Highlights
Get Market Linked Returns!
Zero hidden costs
Loyalty Additions on Maturity"
Highlights
Get Market Linked Returns!
Zero hidden costs
Loyalty Additions on Maturity"
Highlights
Market-Linked Returns with upto 50X Life Cover
3X Mortality Charges Returned‘
Loyalty Additions#*
Not sure? Check out our other plans
What Do You Need to Avoid While Choosing ULIP?
- Ignoring Your Risk Appetite
If you’re risk-averse, opt for debt funds; if you can tolerate high volatility, consider equity-based funds.
- Overlooking Policy Charges
ULIPs come with charges such as premium allocation, fund management, and mortality charges. Ensure these don’t impact your returns.
- Focusing Solely on Short-Term Gains
ULIPs are designed for long-term financial goals. Avoid investing if you’re looking for short-term returns, as premature withdrawal may incur penalties.
- Neglecting the Insurer’s Track Record
Don’t overlook the credibility of the insurance provider. Check the insurer’s claim settlement ratio, customer reviews, and fund performance history.
- Skipping Fund Performance Analysis
Always review the historical performance of the ULIP funds. A consistent track record is a better indicator of future returns.
Steps to Buy a ULIP Policy Online
Before choosing a ULIP, identify your long-term financial goals—whether it’s retirement planning, saving for your child’s education, or purchasing a home. This will help you select the right policy and fund type.
Explore the various ULIP plans available and choose the one that aligns with your goals and risk appetite. You can choose between equity, debt, or balanced funds depending on your preferences.
Decide on the premium you are comfortable paying based on your financial capacity. Most ULIPs offer flexible premium payment options, whether it’s annually, semi-annually, or monthly.
Select your investment strategy and fund options to decide how you want to allocate your money. You can also adjust the fund allocation over time based on market performance or life stage changes.
Fill in the application form online or at a branch, and submit it along with the required documents. You can also complete the entire purchase process digitally by buying your ULIP online.
Once your application is processed, you will receive the policy document. You can now track your ULIP plan’s performance and manage your investments online.
What Are the Documents Required to Buy ULIPs?
Here's a list of documents typically required for buying a ULIPs:
PAN Card Number :
We will need to verify your Name & Date of Birth.
Aadhar card/ Driving License Number
We will need this to verify your Address
Online income proofs documents
We will need this to verify your financial eligibility. e.g.bank e-statement, e-Filed ITR
Talk to our Expert advisors to learn more
Calculate your returns today! (no personal details asked)
Current market value of the units held in your ULIP fund. It’s calculated by multiplying the number of units you own by the current Net Asset Value (NAV) of each unit. The fund value represents the total worth of your funds at any given time.
NAV is the price of one unit in the ULIP fund. It fluctuates daily based on market performance. The NAV is the value of the fund's assets minus liabilities, divided by the total number of units. It’s a key indicator of your growing wealth.
This is the process of dividing your premium between the life cover and the various funds. After premium allocation charges are deducted, the remaining portion is used for your chosen funds (equity, debt, or balanced).
The additional premium you can pay over and above your regular premium to boost your chances of building wealth. Top-up premiums allow you to add more funds and grow your wealth faster.
The lock-in period is the minimum period (usually 5 years) during which you cannot withdraw or surrender your ULIP without incurring penalties. After this period, you are free to make partial withdrawals or surrender the policy.
If you decide to exit your ULIP before maturity, the surrender value is the amount you’ll receive after applicable charges. Surrendering during the lock-in period will result in penalties and lower returns.
Switching refers to the ability to shift between different ULIP funds (equity, debt, or balanced) depending on market conditions or your risk appetite. Most ULIP plans allow a certain number of free switches per year.
After the lock-in period, partial withdrawal allows you to take out a portion of your accumulated fund value while keeping the policy active. This is useful for meeting financial needs without surrendering the entire plan.
The sum assured is the guaranteed amount your family will receive in case of your untimely death during the policy term. It’s the life insurance component of the ULIP, ensuring financial protection for your loved ones.
A rider is an add-on feature that enhances the benefits of your ULIP, such as critical illness cover or accidental death benefit`. Riders come at an additional cost but provide extra protection tailored to your needs.
The FMC is a fee charged by the insurer for managing your wealth in the ULIP. It’s deducted from the fund’s assets and can impact your returns. IRDAI caps the FMC at 1.35% annually for equity funds.
The mortality charge' is the cost for providing life insurance coverage. It is deducted from your premium or fund value and is based on factors like age, health, and the sum assured.
FAQs About ULIP Plan
Here are some frequently asked questions about ULIP Plan
Are ULIPs a good way to build wealth?
Yes, ULIPs are a good option for those looking to combine life insurance with market-linked returns. They offer flexibility, tax benefits, and the potential for long-term wealth creation, making them ideal for individuals with specific financial goals like retirement or child’s education.
Are ULIPs risky?
Like any market-linked instrument, ULIPs carry some level of risk, especially when investing in equity funds. However, you can mitigate this risk by choosing debt or balanced funds, depending on your risk tolerance.
Can I cancel/surrender my ULIP plan?
Yes, you can cancel or surrender your ULIP plan, but doing so before the lock-in period of 5 years will result in penalties, and you may not get the full value of ULIP.
When can I withdraw from a ULIP?
You can start withdrawing from your ULIP after the 5-year lock-in period. Partial withdrawals are allowed, providing liquidity when needed, but it's essential to review the terms for any charges or conditions.
Will I incur losses if I withdraw a ULIP?
Withdrawing early or during market downturns may result in losses, as the value of your ULIP is linked to market performance. It's advisable to plan withdrawals strategically to avoid significant losses.
What is the minimum premium amount for ULIP?
The minimum premium for a ULIP plan varies by provider. At Bandhan Life, the minimum premium starts as low as ₹3,000 / month, making it accessible for different types of investors.
Is a ULIP taxable at maturity?
No, the maturity benefits of a ULIP plan are tax-free under Section 10(10D) of the Income Tax Act, provided certain conditions are met, such as the life cover being at least 10 times the annual premium.
What is the difference between a ULIP & SIP?
The key difference is that a ULIP offers both life insurance and wealth creation, while a SIP (Systematic Investment Plan) is purely an investment tool. ULIPs offer tax benefits and the flexibility to switch funds, while SIPs are more straightforward with no insurance component.
What are the charges in ULIP?
ULIP plans come with various charges, including premium allocation, fund management, and mortality charges for the life insurance cover. It’s important to review these charges before investing to understand their impact on returns.
Can I Take a Loan Against My ULIP Policy?
Yes, you can take a loan against your ULIP policy, provided certain conditions are met. Most insurers allow loans only after the completion of the 5-year lock-in period. The loan amount is typically a percentage of the surrender value, ranging from 50% to 80%, depending on the insurer’s terms.
It’s important to review the applicable interest rates, as these vary across insurance providers. While repayment terms are usually flexible, timely payments are crucial to avoid policy termination. Taking a loan against ULIP can be a convenient way to access funds without surrendering your policy. Always check your insurer’s specific guidelines for loan eligibility and repayment options to make an informed decision.
What Happens If I Stop Paying ULIP Premiums After 5 Years?
If you stop paying ULIP premiums after the 5-year lock-in period, your policy may continue under a reduced paid-up status. This means the policy remains active, but the benefits, including life cover, may be significantly reduced.
One advantage of stopping payments after 5 years is that no surrender charges are applied, allowing you to withdraw the accumulated fund value without penalties. However, depending on your insurer’s terms, your life cover may lapse if the fund value is insufficient to cover the policy charges. You can also choose to surrender the policy entirely and receive the fund value. To explore alternatives like partial withdrawals or policy revival, it’s advisable to consult your insurer and assess how the decision aligns with your financial goals
1
BEWARE OF SPURIOUS PHONE CALLS AND FICTITIOUS/ FRAUDULENT OFFERS!
IRDAI is not involved in activities like selling insurance policies, announcing bonus or investment of premiums. Public receiving such phone calls are requested to lodge a police complaint.
Bandhan Life iInvest Advantage (UIN - 138L090V01) is a unit-linked non-participating individual life insurance savings plan. Life insurance cover is available under this product. Unit-linked life insurance products are different from the traditional insurance products and are subject to risk factors.
Bandhan Life ULIP Plus (UIN - 138L091V01) is a unit-linked non-participating individual life insurance savings plan. Life insurance cover is available under this product. Unit Linked Life Insurance products are different from traditional insurance products and are subject to risk factors.
[‘] An amount equal to total of premium allocation charges deducted from the base premium (excluding taxes) during the policy term will be added back to the Base Fund value at the end of the 10th policy year and up to 3X mortality charges will be returned to the fund value starting from 11th year.
[#*] Loyalty units will be added at the end of 7th policy year and every policy year thereafter till maturity, provided all due premiums have been received.
[!] Premiums paid in unit-linked life insurance policies are subject to investment risks associated with capital markets, and NAVs of the units may go up or down, based on the performance of the fund and factors influencing the capital market and the insured is responsible for his/her decisions. Please make your own independent decision after consulting your financial or other professional advisor. The performance of the managed portfolios and funds is not guaranteed and the value may increase or decrease in accordance with the future experience of the managed portfolios and funds.
Bandhan Life iInvest II (UIN - 138L089V01) is an online, unit-linked non-participating individual life insurance savings plan. Life insurance cover is available under this product. Unit-linked life insurance products are different from the traditional insurance products and are subject to risk factors.
[%] Tax benefits under the policy are subject to conditions under Sections 80C, 10(10D), 115BAC and other provisions of the Income Tax Act,1961. Goods and Services tax and Cesses, if any will be charged extra as per prevailing rates. Tax laws are subject to amendments made thereto from time to time. The Company does not assume responsibility on tax implication mentioned anywhere in this page. It is recommended to obtain professional advice for applicability of tax benefits.
[^] Individual Death Claim Settlement Ratio for Bandhan Life Insurance Limited for FY 2023-24 is 99.66% as per annual audited figures.
[‘] At the end of policy term, total mortality charges including the extra mortality charges and excluding the applicable taxes would be added to the Total fund value provided all due premiums have been received.
[”] For policies with policy term of 15 years and above, loyalty units will be added at the end 15th policy year and every 5th policy year thereafter till maturity, provided all due premiums have been received.
[`] Besides providing financial protection against death, Bandhan Life Accidental Death Rider (UIN: 138B006V05 and all succeeding versions) Provides a Lump-sum benefit equal to the base Sum Assured in case of death due to accident of the Life Assured provided its Premium Payment Term and Policy Term are consistent with the Premium Payment Term and Policy Term of the base plan. Please refer the sales brochure of the rider to understand the benefits and terms & conditions before concluding the sale.
Bandhan Life Insurance Limited is only the name of the Life Insurance Company and Bandhan Life iInvest Advantage (UIN - 138L090V01), Bandhan Life iInvest II (UIN - 138L089V01), Bandhan Life ULIP Plus (UIN - 138L091V01) are only the names of the unit-linked life insurance contract and does not in any way indicate the quality of the contract, its future prospects or returns.
Please know the associated risks and the applicable charges from your insurance agent or intermediary or policy document issued by us.
Life Insurance cover is available in this plan. For more details on risk factors, terms & conditions please read sales brochures and benefits illustrations carefully before concluding a sale. Issuance is subject to board-approved underwriting policy.
Buying a Life Insurance Policy is a long-term commitment. An early termination of the policy usually involves high costs and the surrender value payable may be less than all the premium paid.
Past performance of the investment funds do not indicate the future performance of the same. Investors in the Scheme are not being offered any guaranteed / assured returns. The premiums & funds are subject to certain charges related to the fund or to the premium paid
Various funds offered under this contract are the names of the funds and do not in any way indicate the quality of these plans, their future prospects and returns.
[*] T&C Apply.
iInvest Advantage Flexi Cap Fund Pop up:
[**] Performance refers to Equity Flexi Cap Fund for 5Y CAGR as per Value Research as on 7th May 2025.
Source: Value Research
[%] Premium Paid, Maturity Benefit, Death Benefit and Surrender Value are eligible for tax benefits subject to the conditions under Sections 80C (under OLD Regime of The Income Tax Act, 1961 only), 10(10D), 115BAC and other provisions of the Income Tax Act, 1961. Goods and Services Tax and Cesses, if any, will be charged extra as per prevailing rates. Tax laws are subject to amendments made thereto from time to time. Please consult your tax advisor and take independent tax advice for eligibility and before claiming any benefit under the policy.
[”] For policies with policy term of 15 years and above, loyalty units will be added at the end 15th policy year and every 5th policy year thereafter till maturity, provided all due premiums have been received.
[‘] At the end of policy term, total mortality charges including the extra mortality charges and excluding the applicable taxes would be added to the Total fund value provided all due premiums have been received.
Flexi Cap Fund (SFIN Number ULIF01828/05/24FLEXICAP0138) is not a standalone product and is available for sale with Bandhan Life Unit Linked Insurance Plans Only.
Bandhan Life Insurance Limited (formerly Aegon Life Insurance Company Limited), IRDAI Reg. No. 138. Corporate Identity No: U66010MH2007PLC169110. Registered Office: Bandhan Life Insurance Limited. A – 201, 2nd Floor, Leela Business Park, Andheri-Kurla Road, Andheri (E), Mumbai – 400059. Tel: +91 226118 0100, Toll Free No.:1800 209 90 90 (9 am to 7 pm, Mon to Sat), Email: customer.care@bandhanlife.com. Website: www.bandhanlife.com. ADVT No. II/Feb 2025/7587.